Understanding the Bankruptcy and Insolvency Register (BIR)

When financial challenges become overwhelming, seeking relief through formal insolvency procedures might be the best course of action. However, the process doesn’t end once you’ve declared bankruptcy or entered into an Individual Voluntary Arrangement (IVA) or a Debt Relief Order (DRO). Your financial affairs become a matter of public record through the Bankruptcy and Insolvency Register (BIR). In this Johnny Debt post, we delve into what information the BIR holds, focusing on bankruptcy, IVAs, DROs, and their implications.

What is the Bankruptcy and Insolvency Register?

The Bankruptcy and Insolvency Register (BIR) is a searchable online database that contains information about individuals who have declared bankruptcy, entered into an IVA, or obtained a DRO. It serves as a public record, allowing creditors, lenders, and the general public to access information about individuals’ insolvency status.

Information Held on Bankruptcy

Bankruptcy is a formal insolvency procedure designed to provide relief to individuals who are unable to repay their debts. When someone is declared bankrupt, their assets are typically sold to repay creditors, and any remaining debts are usually written off. The BIR holds various details about bankrupt individuals, including their name, address, occupation, and the date of bankruptcy.

Individual Voluntary Arrangements (IVAs)

An Individual Voluntary Arrangement (IVA) is a legally binding agreement between an individual and their creditors to repay debts over a specified period, usually three to five years. While IVAs offer a way to avoid bankruptcy and protect assets, they also involve certain disclosures. Information about IVAs, including the debtor’s name, address, and the terms of the arrangement, is recorded on the BIR for public access.

Debt Relief Orders (DROs)

Debt Relief Orders (DROs) provide a route to insolvency for individuals with low income, minimal assets, and relatively low levels of debt. Similar to bankruptcy and IVAs, DROs result in the inclusion of specific information on the BIR. This includes the debtor’s name, address, date of birth, and the date the DRO was granted.

What’s Not Included?

While the BIR captures details of bankruptcy, IVAs, and DROs, it’s important to note that certain debt management solutions are not included in this register. Full and final settlements, often negotiated directly with creditors, as well as Debt Management Plans (DMPs), which involve repaying debts over an extended period without formal insolvency proceedings, are not recorded on the BIR.

Implications of Being on the BIR

Being listed on the Bankruptcy and Insolvency Register can have significant implications for individuals. Firstly, it’s a matter of public record, meaning that creditors, lenders, and potential employers can access this information. While bankruptcy, IVAs, and DROs provide relief from debt, they can also impact credit ratings and future financial opportunities.

Accessing the Bankruptcy and Insolvency Register

The BIR is freely accessible online, allowing anyone to search for information about individuals who have undergone bankruptcy, IVAs, or DROs. This accessibility ensures transparency in financial matters and allows creditors to make informed decisions when dealing with potentially insolvent individuals.

Bankruptcy and Debt Relief Restrictions Section

The Bankruptcy and Debt Relief Restrictions Section allows you to search for individuals who have faced additional insolvency restrictions in the last three months. This list includes people who have violated the terms of their bankruptcy or Debt Relief Order. As a consequence, they may have received penalties known as Bankruptcy Restrictions Orders (BROs) or Undertakings (BRUs), or Debt Relief Restrictions Orders (DRROs) or Undertakings (DRRUs). These penalties signify serious breaches of insolvency regulations, and accessing this information can provide insight into individuals’ financial conduct and any associated repercussions.

Here are a couple of examples where:

Individual 1: obtained a £50,000 Bounce Back Loan (‘BBL’) to which he was not fully entitled and did not use the BBL obtained fully for the economic benefit of the business..

Individual 2: obtained a £50,000 Bounce Back Loan (‘BBL’) to which he was not fully entitled and did not fully use the BBL obtained for the economic benefit of the business. He filed his own petition with liabilities of £61,429.

Individual 3: sold a vehicle she did not own, which was subject to a Conditional Sale agreement dated 9 September 2020, contrary to the terms of the agreement, causing a loss to the finance company of £29,979. 

Taken from the The Insolvency Service site.

It would seem that as you go through that list, many people obtained Bounce Back Loans to which they were not entitled or did not use it fully for the benefit of their business. So if you have been really bad, you could end up on Bankruptcy or Debt Relief Restrictions Section

Conclusion

In summary, the Bankruptcy and Insolvency Register plays a crucial role in providing transparency and access to information about individuals’ insolvency status. Whether it’s bankruptcy, IVAs, or DROs, the BIR holds key details that can impact individuals’ financial futures. While seeking relief from overwhelming debt is essential, it’s vital to understand the implications of being listed on the BIR and to explore all available options carefully. If you’re facing financial difficulties, seeking advice from a qualified insolvency practitioner or financial advisor can help you navigate the process and make informed decisions about your future.